UK Conduct Regulator Consults On Rule Alignments For EU Securitization Framework

On August 1, 2018, the U.K. FCA launched a consultation on proposed changes to its rules to ensure consistency with the provisions of the directly applicable EU Securitization Regulation (also known as the STS Regulation) and related amendments to the CRR, which take effect across the EU on January 1, 2019. This forthcoming EU legislation will introduce a new framework for simple, transparent and standardized securitizations, intended to make the EU securitization market function more effectively.

The Securitization Regulation creates a new category of entity, the Third Party Verification agent, or TPV. A TPV can be voluntarily appointed by a sponsor, originator or securitization special purpose entity to verify that a securitization complies with the STS criteria, so as to attain classification as Simple, Transparent and Standardized. TPVs will be authorized and supervised by national regulators. The FCA proposes to open an application gateway for prospective TPVs